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Oracle's Hostile Takeover Bid For PeopleSoft
rkuris writes "Oracle has launched a 5.1 billion dollar cash hostle takeover bid against Peoplesoft. PeopleSoft's CEO Craig Conway (a former top executive for Oracle) called Oracle's offer 'atrociously bad behavior from a company with a history of atrociously bad behavior.' 'Obviously it is a transparent attempt to disrupt the [1.7 billion dollar friendly] acquisition of J.D. Edwards by PeopleSoft announced earlier this week.' The week's events have reopened old wounds between the companies, which have a history of hostility and name calling."
Bad - I don't know about you, but I was pretty pissed off when AT&T sold their cable unit to Comcast. I got a call one Saturday morning from some company that I have never personally signed up with, offering to change my channel selection for me. Imagine paying a few hundred thousand dollars after having chosen Peoplesoft, only to have Oracle call you up one day, and say, 'hey, you're our new customer!'
Good - I suppose this'll be good for Oracle, and maybe, at the end of the day, customers will win because of the integration of two not-too-bad software suites.
I'm assuming you misspelled zealot, and I'm also assuming you're an idiot. Why would you sell it to Oracle (for $16/share) when you could sell it on the open market for more (almost $18/share right now)?
It seems obvious that this offer was designed to intimidate PeopleSoft, disrupt the JD Edwards acquisition, and cast doubt on the future of PeopleSoft's products so that customer's would be less likely to buy.
Oracle is one of the BIG supporters of Linux. They are now running their own operations on Linux and are in the process of converting their customers to Linux. Oracle is the good guy in this fight. They are a good friend to Linux and deserve our support. Let's give them the benefit of the doubt. Remember, the IT world is a shark tank -- it's eat or be eaten. Someone's going to be doing the eating, and it is better Oracle than [ name of comany in Redmond omitted ].
For those of us who are clueless about this sort of thing, would someone care to enlighten the masses?
File under 'M' for 'Manic ranting'
The Roman Takeover of Gaul
Read the pricewaterhouse coopers analysis
and this other commentary
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The Spiders are coming
it was not 18 bucks per share the other day when this offer was first anounced.
it was around 10 dollors per share.
I am the Alpha and the Omega-3
Let me put it like this: my bro. in law is a GM at a industrial trucking company. He's got a masters in probability and statistics but isn't "in the business" per se. When he talks to me about "his weekly Oracle having problems," he's not thinking of a database -- he's thinking of the Oracle Apps reports that come out on his printer.
In enterprise, "Oracle" is like "Xerox" or "Kleenex" -- it's the apps, the engine is invisible. If Peoplesoft bought J.D. Edwards, they'd challenge Oracle on that level.
If Microsoft had any sense they'd sell the biz apps. The DB is irrelevant -- it's the schemas that people buy.
Instead of looking at this acquisition from a purely rational, coldly analytical perspective, we should and must begin to look at the quality of the lives of the employees. I would prefer to work for an organization like PeopleSoft. It is an organization that cares.
Oracle is cut from the same cloth as Sun, Siebel, and Cisco. Brutal, cut-throat, survival of the fittest. Increasingly, with the influx of H-1B's and "free" trade, American companies are becoming the ruthless of ogres of the early part of the 20th century. Most of my American colleagues do not want an America where employees are savaged. We gladly accept a small reduction of economic expansion in exchange for a kindler and gentler American workplace and society.
It is this kindler and gentler America that has drawn tens of millions of immigrants to this country.
We shareholders should oppose this hostile takeover and send Larry Ellison back to the Orient that he so admires.
How would the Oracle purchase of Peoplesoft affect Linux? Oracle has been pushing Linux for a while. Peoplesoft is mostly installed on Windows (apparently Peoplesoft has pretty spotty support for Linux & Solaris).
A number of large businesses and private and public universities in the SF Bay Area have been installing Peoplesoft. The name "Peoplesoft" keeps coming up in discussions, and is usually accompanied by some cussing by the people who use it.
IIRC, UC Berkeley and Cal State Hayward are both moving from their inhouse solutions to Peoplesoft for the student record database (Causing many headaches among the students and staff). I've talked to some Unix admins at both places who griping about having to learn Windows and Peoplesoft.
These Universities are cutting budgets, but are still spending money on hardware, Windows licences, staff, training, training, and more training to accomodate the new Peoplesoft solution. The HR dept says this will save them lots of money.
But if Oracle takes ownership of Peoplesoft, will we see more Linux support in the future?
"Can of worms? The can is open... the worms are everywhere."
I've been wondering what this would mean for the MySQL/SAP deal announced a week or so ago.
To date SAP has wanted to be agnostic to the underlying database that their software runs on, so you could view the MySQL deal as a nice headline but not really something that was going to have SAP's salesforce pushing MySQL into enterprise customers.... They'd be just as happy if those customers ran Oracle as long as they ran SAP on top of it.
However, if Oracle owns PeopleSoft they suddenly become SAP's largest competitor. As soon as that happens a major SAP infrastructure provider is now the enemy, and SAP might suddenly have reason to push another solution vs. allowing the customer to choose. After the deal with MySQL that solution might well be MySQL.
Faced with the need for an ERP program, traditionally you could hire some programmers, wait a couple of years for them to create the software, and see if it worked, or was a big disaster.
.... kind of up and running.
Or, you could purchase from Oracle, Peoplesoft. Datatel, SCT, etc, gamble a lot of money, maybe discover you have to change your business processes to fit the software, and in a couple of years you may be
I worry that if Oracle buys Peoplesoft, we lose a choice, such as it is. It's already a complex dynamic, and this may make the choices a bit more narrow.
When you offer your company for sale, you have only yourself to blame when someone makes a bid to buy it. And offering your company for sale is exactly what you're doing when you issue stock.
I have no sympathy for companies that want to be publicly traded corporations but then pretend that they're a private firm.
A Government Is a Body of People, Usually Notably Ungoverned
The problem with this quote is that it refers to the sales force.
As a developer in the server technologies division of Oracle, I'd have to say that I don't see the "intense competition" that is mentioned. Within my group of about 50-100 (that is, all of the people below the closest VP), there is a true spirit of cooperation. If I have a problem with a specific line of code or a new technology I am learning, there are many other people on the team who are willing to help (just as I am willing to help them), even if they are not working on the same project as me. I know it sounds idealistic, but that's what the real situation is in development.
This cooperation even extends to the H-1Bs, and all of the other recent immigrants with whom I work. I'm one of the few people in my group that was born in America and speaks English natively. However, I look at having this diversity in the group as a positive and not a negative as it brings different viewpoints to technical discussions and makes non-technical discussions a little more interesting.
Now, sometimes there is a level of competition between teams, as each team thinks it knows the best approach to a given problem. But that is healthy, and it forces a detailed refinement of the approaches so that the "higher ups" can make a decision regarding which approach is most appropriate.
So, I can't speak for the sales force, but I don't know if the development cultures are as different as the quote suggests.
Oracle's got the dough, as you'll see here. With $1.15 cash in hand per share, at 5.24 Billion shares outstanding, that's around the $6 billion mark right there. A large portion of this purchase could be made in Oracle stock or by arranging a loan (the technique made famous in the 80's, the Leveraged BuyOut or LBO) as well, reducing the need for cash.
Either way, this story is only just beginning. Analysts portend a consolidation wave coming in the software field. Also consider that Oracle's standing offer amounts to $16 per share of Peoplesoft, but the stock price on Friday closed at $17.82. That means the folks who know best (investment bankers, merger arbitragers) see this as the first step in a longer auction process.
Stop by my site where I write about ERP systems & more
PeopleSoft runs mostly on Microsoft Servers. The thought of losing a potential revenue stream might cause Ballmer to dip into petty cash and settle this argument overnight. Oracle is not going to integrate PeopleSoft; they are buying a customer list and less competition, in addition to kicking a few more thousand geeks to the curb.
Microsoft could pick them up, keep them as a separate line of business, with management autonomy and shareholders would go for that in a heartbeat. This could turn out to be a very bad move by Oracle. If Microsoft so mch as raised an eyebrow, Oracle stock goes down, making the aquisition more expensive even if Microsoft doesnt play. I see a lot of ways that Oracle could end up regretting this big time.
At two previous jobs I used PeopleSoft's suite and found it lacking. At one I did a bit of reverse engineering on the database, and I had perl scripts generating better reports than their $x million software, which also crashed daily. (Nobody seemed to know exactly what x was, but afaict everybody who had to do with the decision to use PeopleSoft no longer worked there. Which might tell you something.) Oh, and for all the article's 'PeopleSoft is (used to be) a caring company' lines, I can assure you that once they have your money they don't care the slightest about their customers, even when you're still paying for service.
On the other hand, during that same period, I talked to a number of people about Oracle's suite (Oracle E-Business Suite, OEBS) as a potential replacement. There are lots of sites talking about all the money and time people save using OEBS, just as there are for PeopleSoft. But every person I actually talked to said, essentially, that it was crap and they regretted it, but don't tell anyone.
So, I guess my point is that both of them are basically crap software that got their reputation because no public company would ever admit to their shareholders that their well-researched software decision was a multi-million dollar disaster. So they deserve each other.
And on that note, I think I'm going to post this anonymously, since even though it's all true libel suites are time consuming.
A PeopleSoft employee, and I can tell you that we aren't selling to Oracle.
Acquiring JD Edwards is going to make us #2 in the field, and Oracle #3, which is why Ellison wants to take us over, kill our product, and terminate all of our jobs.
Craig Conway (PeopleSoft CEO) has already told all of us that he won't let "Ellison kill PeopleSoft".
On top of all that, the offer made to PeopleSoft by Oracle per share is now lower than the price it's trading at. Take that into account, plus what the company will be worth after acquiring J.D. Edwards, and Oracle won't be able to convince the shareholders to go along with it.
Vonal Declosion
From working with both companies owith their 'erp' applications, neither is anything to write home about.
.. eeek.
Both were poorly managed, *not* user friendly and had MAJOR cost over-runs. ( in our case in the millions of dollars, mainly due to overselling on their part that borderlined on fraud in oracles case ), not to mention techincal issues right and left.
Having them both under one roof
Disclaimer, oracle project was 5 years ago, they might have improved since then, but i doubt it )
---- Booth was a patriot ----
I've used and managed an AS400 with JDE for the past 3.5 years.. and although I don't like the product I have respect for it..
And I've had dealings with Oracles management..
these guys do not fsck around.
They are a VERY driven, powerful bunch of people who get what they want, and get it because they ain't afraid of stepping on toes.
JDE needs to watch their step, cause these guys won't give up easily.
"Consider how lucky you are that life has been good to you so far. Alternatively, if life hasn't been good to you so far
They acquired it by buying a German company (StarDivision)at a good price, and made a few improvements.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
The reality is that Oracle and Peoplesoft have culturals as different as two companies can possibly be. Oracle is of the chewing them up and spit them out school. If Oracle has a soul, it is a very dark one. On the other hand, Peoplesoft has a soul and it is a soul which - how every imperfectly - trys to care for the employees while still calling forth the best from its employees.
If Oracle were to make this hostile bid come to fruition, the majority of Peoplesoft employees would be heading for the door as quickly as possible. The end result would be a pile of IP in Oracle's hands, but not any of the people that can take that IP and extend it and bring value from it.
Of course, the Larry Ellison isn't going to see it that way. Rather, he is seeing that I can take these two pieces and put them together and they will work the way that I anticipate. Why? Because everyone works the way he expects - or he gets rid of them, the list of folks that have bailed out of Oracle due to Larry is very long - and that is just the way it will work out in his world. He isn't going to think about culturally compatibility. But then again that is true of most CEOs trying to build empires. Why do you think that most mergers end up being failures?
You had best start looking anyways, regardless if the bid goes through or not the additional information the mass business public has gleaned on the purchase of JDE is going to severely tarnish PeopleSoft. You guys will now work REALLY hard to make sales because people are going to be iffy on your future. After the of JDE aquisition you won't be #2 for long if you are even are when the merger is completely done. Oracle has been really smart with this, it is win-win for them.
--- I do not moderate.
There are some contractual things you can't get out of. You can't cancel existing contracts, which is the reason a "poison pill" defense sometimes works, and there are various contractual guarantees made to major investors that can create "classes" of shareholders (preferred, common, etc.), which makes it a little more complicated than just a question of percentages.
However, the answer to your question is mostly "yes". As 51% shareholder, you can typically completely replace the board of directors, because the board is elected by the shareholders (which means the owners) to represent their interests. New 51% owners usually want new representatives for their new interests, and the 49% owners can't raise the votes to stop them.
Then, since the CEO works for the board, the new board appoints a new CEO, who then replaces the senior execs, who all report to the CEO. They can then replace anyone below them who doesn't support the new regime.
I should add that the term "hostile takeover" is frequently just the viewpoint of the existing management. It's hostile to them because they may be thrown out by the new owners. It may not be hostile at all from the perspective of the existing small-scale shareholders -- the "outsiders".
Another possibility (in some cases) is that the old insiders club (the board and their pet CEO and his cronies) may have been milking the company for their own personal gain and there was nothing the small-scale shareholders could do about it. The big guys are making a pile of money off the company, while the company itself goes nowhere because it's being managed for the benefit of the top management, not the common shareholders.
Then a new team comes to town and offers a lot more money for common shares than the shareholders were going to get any other way. Whether the shareholders sell to the new guys or keep their now-higher-valued shares, the game has changed. Now, the old management tells everyone that the new guys are "hostile", but that may not be the way everyone sees it. They may end up more corrupt or incompetent than the old management, or they may be the first good thing for the common shareholders in years, but either way they'll be called "hostile" by the old management.
"Those who have never entered upon scientific pursuits know not a tithe of the poetry by which they are surrounded."
Sun's original intentions were not to open the source. They had originally hoped to use it as an alternative to Microsoft Office, but that dream was quickly squashed. They did the next best thing (for which I am grateful).
Note that StarOffice, the full product, is not open source. It becomes open source (and integrated into Open Office) as features trickle into the public domain. Certain parts of StarOffice are tied up in IP restrictions. Fortunately they are not too important.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON